Transit fee rivals Russia, Kazakhstan “happy” China-Kyrgyzstan-Uzbekistan railway not progressing

Transit fee rivals Russia, Kazakhstan “happy” China-Kyrgyzstan-Uzbekistan railway not progressing
/ Third Pole
By bne IntelliNews May 13, 2024

Russia and Kazakhstan are happy with the continuing delays afflicting the proposed $8bn China-Kyrgyzstan-Uzbekistan (CKU) railway as the mega-infrastructure undertaking could deprive them of significant transit revenues if it was realised, according to an analyst.

“Kyrgyzstan and Uzbekistan face financial restraints in funding the project, and China, which could unilaterally finance it, has lost interest and seemingly does not view the project as a priority,” Syed Fazl-e-Haider, a contributing analyst at the South Asia desk of Wikistrat, wrote in a commentary for The Jamestown Foundation.

As Uzbekistan is already connected to Turkmenistan and Iran by rail, the CKU railway initiative offers the potential to lay on the shortest rail route between China and Europe. Uzbekistan and Kyrgyzstan could then dislodge Russia and Kazakhstan as the central transit partners for Chinese exports.

The concept for the CKU was first advanced around 30 years ago. In the past couple of years, Beijing, Bishkek and Tashkent started to talk up the chances of building the joint railway in the very near future, but lately, China, faced with economic difficulties at home and evolving geopolitical considerations in its relations with Russia and largest Central Asian economy Kazakhstan, appears to have cooled on providing major financing that would make the investment a reality. Bishkek remains upbeat about a project start in the coming months, but has little financing to show for its optimism.

Fazl-e-Haider said the project now “runs the risk of completely unraveling due to geopolitical and alliance changes in Central Asia”.

He added that “although China could fund the project on its own, Beijing seems to have deprioritized the project, possibly to avoid disrupting Russia’s and Kazakhstan’s respective positions in regional transit.”

The CKU was once seen as a crucial component of China’s ambitious multi-continent Belt and Road (BRI) infrastructure initiative. The 454-kilometre (282-mile) railway would traverse western China and Kyrgyzstan thanks to the construction of at least 50 tunnels and 90 bridges through Kyrgyzstan’s highest mountain range. After connecting to Uzbekistan, the CKU would ultimately provide passage to railway networks in Europe via Turkmenistan, Iran and Turkey.

In 2023, there were various media reports suggesting that the CKU project had been postponed indefinitely due to disagreements among the three parties on the route the railway should take. China and Uzbekistan favour the southern route, offering a shorter transit route to Europe and the Middle East, according to Fazl-e-Haider. He added that Bishkek has insisted on the northern route—it would mean a longer passage, but it would connect Kyrgyzstan’s north and south and boost the country’s economy.

More recently, under pressure from China and Uzbekistan, Bishkek has shown potential willingness to accept the less costly southern route, according to a VoA report.

Last October, Gennady Bessonov, the secretary-general of the International Coordinating Council for Trans-Eurasian Transport, speculated that Beijing may be dragging its feet on the CKU so as not to disrupt Russia and Kazakhstan’s central role in regional transit.

Noted Fazl-e-Haider: “Moscow’s war against Ukraine has caused pivotal upheavals for regional trade and transit. Western sanctions have compromised traditional Kremlin-dominated routes, causing Russia’s partners to become creative in circumventing restrictions. The shifting geopolitics in Central Asia may have contributed to China losing interest in the CKU project.

“If constructed, the railway could curtail the use of transit routes that pass through Russia and Kazakhstan, Beijing’s more influential partners in the region. China may be reluctant to affect its ties with Russia and Kazakhstan, as this development could compromise its access to European markets in the immediate term.”

Last November, Kyrgyz President Sadyr Japarov was reported by VoA as expressing disappointment that China’s interest in the CKU project was declining and lamenting to MPs: “Geopolitics have changed, alliances have changed. All this is an obstacle to the progress of the project. … Kyrgyzstan and Uzbekistan need this [rail]road. And China, our friends, is dissuading us from the project.”

A Bishkek-based expert remarked: “If the CKU is shelved, this will be a big public embarrassment to the Kyrgyz government.”